Fixed Income

February 26, 2018

Ukraine’s sovereign Eurobonds ended lower last week despite a clear demand for high yield emerging market debt. Belarus managed to place USD 600mn in 12-year Eurobonds at a rate of just 6.2%, with demand for the issue far over-subscribed at USD 2.8bn. Belarus and Ukraine have the same B-minus credit rating from Fitch. As a confirmation of the risk-tolerant environment, a survey prepared by JPMorgan Chase said that a third of institutional investors are planning to allocate additional capital to emerging-market strategies this year. In Ukraine-related news, President Poroshenko said he will continue to insist on the introduction of a peacekeeping mission in the Donbass, which has now been occupied by pro-Russian separatists for nearly 4 years. Such a mission remains unlikely since Russia is refusing to allow any peacekeepers inside separatist-controlled territory.